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hello and welcome my name is joe o'mara i'm the head of aviation finance with kpmg and on behalf of kpmg and airline economics i'm delighted to be joined today by john kluger who is the ceo of earl east corp john thanks for joining us today i think most or nearly all of our our watchers will know who you are but maybe for the small benefit of those who don't would you tell us a little bit about early's corp and their place in the leasing world sure well air lease corporation was founded by steve hausey housing myself in march of 2010 uh as many of you probably know um we were at ilfc before that for many many many years uh and then with the aig uh kind of meltdown um we decided to strike our fortunes elsewhere um and so we started in march of 2010 with a very successful initial capital raise under rule 144 in the united states about a billion three uh we got that initial funding started buying aircraft after the races and then just about uh a year and a month later believe it or not in april of 2011 um we went public on the new york stock exchange um and i think it's the shortest time that somebody has gone public on as i'm told by the nyse since uh from the company's upside uh inception to it's going public but uh we have we built a great team and since then we've uh built our platform into one of the largest and top tier aircraft west stores in the world i believe uh and uh certainly one of the largest if not the largest order book uh in our space thanks about john and given your size and scale you'll have a great view of the market on this whole we're now recording this in the middle of december we are more than nine months million pandemic being declared can you talk to us a little bit about how you've seen the crisis evolve for your customer base over the last nine months and where we currently sit particularly interested in the kind of differences there might be in some of the main geographies around kind of the us europe and asia well as i'm sure uh all of you know it's been really difficult in fact i would say almost devastating for many many many of our customers such a difficult environment when you lose virtually almost all of your traffic in a matter of weeks sort of in the march april time frame and traffic levels remaining so depressed and i would say clearly in my almost 40-year career this is certainly without a doubt the the the biggest uh the biggest uh threat the biggest uh sea change i don't know how you want to call it but it just kind of speaks for itself it's it's almost breathtaking having said that uh i think is a credit to the overall airline industry uh and i would actually call we the lessors now is uh approaching near near almost 50 percent uh of the aircraft fleet are part of that uh i d mar us to be part of that industry the airline has the airline industry has survived and has put on defense measures that has enabled most carriers to continue drawing upon all their capital resources government support uh which speaks to the fundamental need globally of air transport so in view in that you know not too many industries i believe can survive 80 90 revenue hits and cash flow uh reductions for eight nine ten months and still be here yet the airline industry is and i just think that that speaks to the fundamental importance of the airline industry in the global fabric now moving to the current day um look i think the story is fairly well known domestic recovery uh has proceeded in most parts of the world china has been leading that uh recovery certainly with all virtually almost nearly uh pre-covered levels now with the exception of this past month in november we did see a little bit of a dip as it was just announced a couple of days ago uh in in china domestic traffic russia has largely recovered uh you know to 90 90 or so percent in fact i believe last month they actually for the first time exceeded a 2019 uh level but um you know and the rest of asia broadly has been seeing a recovery and again these things unfold until just a couple of days ago korea had had a really good domestic recovery and so it is a changing picture based upon virus resurgence so i would say overall you know the us is still holding fairly steady down about 60 domestically 65 domestically europe had been at that level summertime but has now retrenched and come back a little bit as the virus resurgence hit europe earlier than it did in the united states surprisingly uh mexico traffic uh has recovered to you know almost normal levels uh 90 plus percent levels pre-covet so while there are pockets of recovery the virus resurgence always provides a big question mark and again i'm making i'm smoking here of domestic recovery internationally is still largely 90 down globally i mean um you know the the the border restrictions and country restrictions have had it had a huge impact and uh and preventing people from flying nobody wants to be quarantined for two weeks and hence you see these huge efforts now for example between hong kong and singapore at establishing air bridges and getting those going as a model to how we can facilitate country to country transport discussions of that across the uh you know certain aspects of europe broadly um so attempts are being made to circumvent uh these quarantine measures which which are needed for from a health perspective uh you know i'm talking to you from my home office in los angeles and we've been into a you know a renewed lockdown if you will for a few weeks so it's really hard to predict where things are going to go because in the most broad sense i think we all know it's a function of virus transmission and hopefully with these vaccines now coming out great news a lot of i think confidence in those and and confidence by the consumers as well as hopefulness by the airlines so hopefully these will start to have an impact but i think you know we're still in for a rough upcoming six months and i'm not on that team john you mentioned that the resilience has been astounding of the whole sector and has been something to behold but we we have seen probably predominantly on the back of the very large government supports that are there relatively few airline failures or even formalized restructurings and has the quantum of that surprised you and that there's been so few and do you think we might be in for a raft more of those over the coming months well joe i understand your your question um i'm not a hundred percent of the view that we haven't seen that many airline failures i think it kind of depends upon what you mean by failure so if you lump it into restructurings and airlines that have entered bankruptcy and have restructured instead of just shut down you know i i do feel that we've had a pretty good level of those i mean all around the world starting in south america from la tom avianca aero mexico uh more recently thai airways philippine airlines virgin atlantic uh over in the uk just completed its uh you know restructuring norwegian for the second time going in so you know in my view unfortunately for air lease corporation uh with the exception of aeromexico uh we have avoided all these uh the other uh major uh bankruptcies or restructurings and so that is happening and i i i i at least from my perspective look at the sentence it's happened at a higher pace than norm especially with these large uh larger carriers many have now been receiving government support and there's and there's many other examples you know some of the air asia entities uh in asia so i actually think we actually have seen an increase in those restructurings having said that um going forward we we expect more uh i announced that in our earnings call a couple weeks ago we very much expect uh to see a continuance uh of and airlines will continue to restructure perhaps some will fold and go away but we think that's going to continue for the next couple quarters now it's hard for me to comment as to the rate or the pace of when this might happen but we certainly at air lease corporation are prepared for uh for this and perhaps a few more of our customers uh having to go that route it would not be a surprise and and then looking maybe more on the new transaction side and challenges there and assessing airline credits as you say who will survive and support and who will thrive what are the metrics you're looking at now when you're evaluating new transactions obviously recently a very large transaction with alaska airlines um just have those met what are those metrics now and has the crisis that we're in fundamentally changed how you assess transactions well joe at the highest level i can just summarize it in in that we're placing our bets on who we think are going to be the survivors i suppose that sounds incredibly obvious but um and and different airlines have different aspects obviously government support is a large factor in fact we're seeing government support not only for airlines that have partial or wholly owned government shareholdings but even in some cases for certain private airlines so that is certainly a factor cash and liquidity is is obviously a big a big point of review um and then also what the airlines have done with in terms of restructuring their fleets to become more efficient for the future we've we've been having major major discussions globally about that and we think that that's a key predictor of who will survive is who is able to actually take advantage of this and to resize their fleets uh and to um replace older much less efficient less environmentally friendly aircraft so we have a broad you know we have a broad calculus it would be wrong that we don't have some formulaic credit uh function that looks you know you've got to be this score here that score here that score there absolutely not management management is huge our confident our confidence level in management teams to be able to negotiate their way through liquidity capital raising uh their reputations for being able to do so um all of these factors um you know weigh in and literally joe it's an individual airline by airline case and i can truly tell you that no two are the same they're all extremely different and and we we we do spend as probably most lessors a vast amount of our time far more than ever before looking at this very question so i can't give you a single answer we look at the total picture based upon the facts and the and the circumstances and the and the aspects which i've mentioned and and on the funding side john when you look at it for you know focusing on the aircraft leasing sector what's your view and where we sit in relation to the debt side so both in terms of the capital markets maybe the more traditional uh aviation banks that have played in the space air lease has been remarkable of what it's been able to raise and the rates you've been able to raise that so very interested in your views as to where those markets sit now well as you point out we have been you know extremely fortunate this year we've done some six dead insurances five or six uh debt offerings almost every one of them at the lowest rates that we've ever had in that specific tenure that we've raised in the past um and i believe that the capital markets will continue to be uh will continue to look favorably upon well-run investment-grade companies uh in our space and we have a triple b flat rating with s p fitch and an a-minus with kroll uh that is sacrosanct for us and it's key to us to get in this low-cost debt funding so from all appearances um now especially with the vaccine news and effectively i think you can argue that you know wall street in the in the global capital markets debt and equity are now sort of pricing and assuming there will be a recovery so on that basis i see uh the public capital markets debt and equity uh as being still pretty open and and pretty friendly you know on the bank side we definitely have seen we don't air lease obviously doesn't rely on bank fundings but we have a wonderful six plus billion dollar backup line of credit with uh north of 45 global banks which which we do do utilize um but banks generally speaking have have gotten shy of the uh of the airline industry and so they have definitely pulled back now we've seen uh a few banks reverse course and and and a couple get in uh get back more into the space but clearly i think uh banks are are taking this time to pull back look and see what their total exposure is to the airline industry i think many of them now believe that actually the leasing companies which have a portfolio broad view based approach to the airline industry in other words opposed as opposed to lending to a certain airline a specific credit uh by by lending to a less or you're actually listen listening you're actually lending to a portfolio of those kinds of credits and so i believe they a lot of them have told us they see that that as a as a better risk um but airlines still are certainly able to access the bank market it has pulled back but i suspect going into the next six months uh you'll see a number of those banks hopefully reopen the abs market has largely been you know shut off understandably understandably a lot of people are watching uh how various different funds that have had abs financing are going to perform and are performing that's completely understandable um i do think going into the spring in the summer as hopefully we will see some green shoots uh that that that the the debt marketplace will come back and i think what you are seeing now and we'll continue to see pursuant to their respective roles you're going to see a big expansion in eca and exxon bank financing just to pick up whatever lack of capacity may be there it wasn't there before the pandemic but certainly as they're now on the lending side in terms of other unique uh types of funding i i don't think there's anything necessarily unique coming from this i suppose that lenders just like lessors may try and try and tighten their lending standards a little bit may try and have uh if you're doing secured lending on aircraft leases which we don't do but if you are um i can imagine banks putting in a little bit more restrictive covenants or want to have a bit more say in extensions and that kind of a thing uh just like now many lessors i think have have taken lessons learned from the last several months and maybe tightening up on some of their terms so um you know i think we'll all see this involved obviously the sale lease back market has really really uh expanded significantly as the leasing industry has come in with with capital uh to buy a lot of positions new aircraft positions and and even used positions from the airlines really helping their liquidity so that that has been a tremendous uh help to the industry uh and in fact i think a big boost to the leasing community so i think we'll see a further expansion in in say at least back financing uh whichever tools and lessors uh or companies that do that utilize to raise their debt so i i don't see much new but i do see hopefully some some rebirthing in with some of the banks and i hope that we see the re-emergence of the abs market more in the spring and summer if you think about you know you obviously maintain a very young portfolio of new technology aircraft but you would trade a lot then as those aircraft move maybe into the midlife space how important do you think it is that that abs market returns as a channel to fund the prospective purchase of that and similar on the banking side so well there aren't challenges i'd say in the earliest piece clearly for the way you've been able to raise capital for your new aircraft just how important do you see abs and bank funding being for maybe other players in the wider space well i do think it's it's more important for other players as you point out air lease for our own financing and funding we don't utilize the abs transactions but the vehicles uh that we have uh our management vehicles our thunderbolt platforms particularly um have utilized abs to raise those funds and that's a very efficient way for us to sell large groups of aircraft as they approach midlife it's just a very efficient way to do it we're not dependent upon it but it it's its efficiency and convenience is really helpful and for that same reason i do think it's uh important u overall globally for the leasing sector and the aircraft trading space uh that these markets do open up uh and and you know sort of come back to uh you know more normalized levels of activity and transaction so you know for air lease it's not critical uh it's it's it's a very uh a good thing for us to be able to sell aircraft in larger quantities when we want to these vehicles but again our fleet is young we're not dependent we have no guns for our head to sell we don't utilize abs in our own in our own alc funding uh profile so but i do think it's been an important tool for the industry and i do think it's important that it come back and maybe shifting gears and looking at the oem side john earlies have very significant orders you've sought to manage that a little bit over the course of the year and how how do you see this crisis impacting how lessors interact with the oems perhaps a realization of the importance that soros play on the order book space yeah well um i made a comment a couple of times i've commented on currently alaska but i think now more so than than the leasing the lessors have always been and and we've grown in this over the past 20 30 years we've always been a tremendous buffer for the industry but now as i believe most think that we are reaching 50 percent of the global marketplace in terms of how aircraft or finance pursuant to a lease i think that our voice is stronger than ever and i would underscore that very very much so with the manufacturers themselves because at the end of the day let's face it a lot of the manufacturers these days depend upon lessors to step in and do sale leasebacks where airlines have had their balance sheets and their liquidity already drawn their debt capacity is already at max uh so i will say that it's become more obvious and it's certainly a state that we are much more important to the oems than ever before and i would just suggest that i think i think they've found newfound respect for uh for the leasing industry and for those of us that are able to step in at a moment's notice if necessary uh expecting a fantastically good deal and in fact i would argue deserving a fantastically good deal write the check for the airplane get get it delivered you know move through this pandemic but it's our strong balance sheet and liquidity i mean you know uh air leases enjoy the highest liquidity that we've ever had some of it has been defensive like uh you know but some of it also has resulted from the fact that we just haven't been able to deploy our capital buying new aircraft with the max grounding and we've had airbus industrial delays so we've now utilized we have that uh advantage that capability and um the oems very much know it and so i i think we're getting a little bit even more respect may that continue um on the keeping with maybe the metal side john what's your expectation for how the pandemic will impact on retirements and how do you see that feeding out into the aviation finance market well i think certainly the pandemic is accelerating retirements i mean uh uh there's just no doubt about it in my and you know from what we see with our customers from all the discussions that we're having um you know there's this balance about um you know a lot of people view well airlines are in a survival mode so they're going to take the cheapest airplanes and operate them and uh you know there is there is that there is some of that but i think the most astute airlines are using this uh to their maximum advantage to accelerate retirement of aircraft that they knew were they're gonna accelerate anyway and more importantly to leapfrog and and push forward especially the larger carriers their environmental sustainability initiatives that's very much a part of the calculus it's not it is it is not just we need to get through this so we're going to operate the cheapest airplanes now uh you know if you really if if you're really between that and a bankruptcy doorstep maybe there's some of that but i would say the most astute airlines are taking this opportunity and are in fact uh replacing those aircraft also a comment we made a number of times um because of the large traffic growth globally in the last we've enjoyed for the past 10 plus years there are a number of aircraft that have actually been operated longer than their time longer than you than you would have known so now the pandemic has absolutely forced uh the clearing out of all of that and and that is continuing and i i think we are you know witnessing kind of a a huge a huge replacement cycle underway it's only muted because there's less airplanes flying and i think there will be less airplanes flying but nevertheless the question is which airplanes remain parked and don't fly again so as i mentioned earlier that's a part a big part of our calculus and who we think is going to be a survivor long term being able to replace older aircraft now enhance environmental sustainability and improve their profile for the long-term future and maybe looking then at distress within the leasing community and you mentioned the amazing liquidity that you guys have built up but and the larger players clearly have had that came into the crisis in good stead you know have maybe been able to tap the unsecured market to have that buffer of liquidity but there's a layer below that don't have that don't have that ability and there's a feeling that distress will have to hit some of those new players bought maybe some expensive aircraft and tightly priced deals what's your outlook that might happen to some other players within the leasing market we've only really seen nordic as your example maybe of a formal restructuring leasing side do you see more of that coming and if so when i do see a bit of that coming uh you know frankly largely as a function of size and again your debt capacity and how tight are your lenders going to be you know in the distant past um you know way way back in the mid 80s to late 80s you know that's how gpa got in trouble it get it became beholding to its lending group um and effectively the lenders took control uh as as they do in crises so i think uh if you are a hundred percent secured and you're relying upon traditional bank financing you have a lower you know you have a lower scale in size and you don't have the depth into the capital markets or the ability to go into the capital markets and raise money in a big way i think there's some squeezing nordic aviation capital is a terrific leasing company we sold a lot of our fact we sold virtually all of our amber air fleet many years ago uh that we first started when we got release going and our atrs to nordic aviation capital terrific company a really good management team but um you know unfortunately the type of aircraft that dominates their fleet tends to be broadly with riskier credits uh and you know just just does not lend itself uh as well to the mainstream uh credit so they've run into that situation and and i i and i wish them well again i i think really highly of them uh but there will be other other players i think that will experience something similar and uh that's one of the key tenets uh of why we are unsecured and why we have our investment grade rating is we don't want our lenders telling us what we need to do we are masters of our own faith and we accept our uh we accept our uh our our wins and we accept our losses but we are responsible we engineer all of them and i think uh those that don't have the luxury of being able to do that are gonna face some squeeze and and those are probably more of the smaller niche players maybe moving from distress to opportunity dislocated mark it definitely throws out opportunities you mentioned that the same at least say at least by piece there which we've seen over the course of the year what other opportunities do you think are out there within aviation finance that this dislocated market could offer well um you know beyond the obvious uh sale lease backs um you know i think we have uh uh you know a great opportunity to magnify something that we've already done and that is uh that is helping airlines restructure their fleets um now more than ever uh in fact bringing capital in to buy aircraft uh from airlines that may need the liquidity when we know we have we can put it somewhere else or or put it with investors who like the midlife space uh and that's one of the purposes that we have ancillary capital available not only in the form of or of the off-balance sheet uh structures that we utilize um but um other investors are coming to us looking for these sorts of uh opportunities and so uh we're in you know you know we're in active discussions along all of these fronts uh where we can take investors who like that space who know how to manage that space uh and pair them up with uh airline needs that we see as we go into this uh into this restructuring um you know and i think i think going forward um we're gonna see more of that uh and and more of that uh more at least especially for air release we're going to see more of that where we we may or may not elect to use our own capital but instead using the thunderbolt and blackbird capital ventures uh which we're doing uh and we're going to continue those and and uh funds like blackbird have been very helpful for us uh just recently in our risk exposure and so we're going to continue to use that in fact amplify that going forward again with this whole idea of resizing fleets replacing and where we can identify a take out of an aircraft and a simultaneous placement of that aircraft elsewhere and it really really helps everybody helps the airlines and helps these investors who who really like this space uh to grow and to work with us frankly in in getting that done and on that investor's side where do you see that predominantly coming from so we've seen um i'd say an investor sophistication in relation to aircraft leasing over the last decade hugely so a lot of new investors that have come do you think it's those type of investors who've been in the space already are they going to be the ones that are funding transactions over the coming years or do you see a new type of investor that might get attracted to something that in theories at the start of a new cycle yeah you know i i think it's actually i would say my speculation is most of it will be or a lot of it will be uh investors that are already in that space that understand it uh that have been through it before um and and and have gone through the analysis have seen how different vehicles are are now performing that they've already invested in uh you know we have heard from many of the same investors that have invested in blackbird and the thunderbolt you know they see this now as a time they want good deals like everybody else does but they see it as a time to grow um i would just say that we would be cautious um everybody there's a lot of smart people in the world and there's a lot of new entities or new funds that are uh either foreign or about to be formed looking to pounce upon you know distressed deals and just to get you know a very high return um because they think they've got a lot of money in the bank they can write a check today uh and just jump in uh at the bottom of this crisis and and and and prosper i would just say looking back over almost 40 years now um that's probably not the kind of investor even though we could try and put something together we're looking for people that remain dedicated to the airline industry in this space uh not opportunistic hedge fund type of approaches that are quick and easy and easy out because at the end of the day joe i think one of the reasons that less that air lease corporation and i would speculate most lessors have been successful is focusing on their customer relationships with their airlines that's what's getting us through this pandemic and that's what's going to succeed in our growth and what i have seen is those who just look at it from a pure return economic perspective get in quick rip of mid teens 20 return uh you know and then it's bye-bye in the sky i think there's some of that going on now we are looking for people that are dedicated and have the same view that we are that we are dedicated to the airline industry we're here for the long term and we're here to grow this business for our shareholders profitably and provide good returns but with a fundamental belief that we are here to stay and we're not looking for quick investors to to jump in i think there's some of that right now um but having said that uh there's not you know to the credit of assets and their values it's pretty there's not a whole lot of transactions that are being done on aircraft that you would want to own at 450 cents in the dollar the values have actually held up in this pandemic remarkably well and so i think that speaks to the to the to aircraft as an investable asset class so looking for long-term investors i think we have them already that are looking to move forward with us in a way that they have in the past and rely on us to guide them and to manage their portfolios for them and the sophistication of those investors john how have we seen that evolve in recent years do you see more credence being put on the lessor that they're partnering with the portfolio diversification the metal itself where do you see the key focus being on the investor side and has that evolved in recent years it has uh to your point joe the investors have certainly become much more educated and sophisticated and that's that's good we we want informed investors we want people to completely understand the risks we take them very seriously but we're hired and paid to manage those risks so uh there is a balance and a trade-off we are you know the more an investor knows the better but then there becomes a fine line there is a difference between reading about it and understanding it from a financial returns and industry perspective which we encourage completely but none of these people have actually done it and it's the execution of uh that vision the investment fund vision and what the goals are it's the execution that is the most critical part and so while the sophistication has increased at the same time uh our premise is simple look we all agree to to do this these are the objectives alc's track record speaks for itself the funds that we manage their track record speaks for itself but we run the show and um we our great strengths in the marketplace and and globally is our speed of execution oftentimes especially now we have to make on the spot decisions we we can't go to committees and we can't go back to these investors hey is this okay we're either doing it or not and you either buy into that and the belief in our management team or you don't so very happy for the knowledge and sophistication which i think has increased tremendously to all benefit but at the end of the day in order for us to achieve what we've been able to do we have to run the show so we're not going to be second guessed we're either hired for our expertise uh and a lot of our ventures we are equity uh investors as well below ten percent but we are equity investors and we also uh structure our fees such that we earn outsize fees only for outsize performance and so we're all aligned so the the sophistication is a good thing but where it borders on sort of day-to-day involvement of of our decisions and what we're doing and second-guessing we're not interested bringing it back to something you mentioned just briefly earlier when we talked about kind of likely retirements esg john has taken a backseat in relation to aviation over the past year which is fully understandable clearly it is an issue that won't go away what are your thoughts on how this crisis will impact esg and aviation and just as a second layered question to that is the sector as a whole and i mean that from a lesso or an airline an oem perspective doing enough to get across the good things that are being done on the environmental side well joe i guess i could say that while certainly the focus is on survival i actually don't think that esg and environment have taken a back seat i think in the big picture as i can attest to in discussions with many airline ceos certainly survival is is key and i'm not i'm not utting that by the wayside but again as i mentioned earlier airlines are very much looking at this as a focus to leapfrog i mean environmental sustainability is the single best biggest initiative of the entire airline industry of iota it's one of their key initiatives as a matter of fact if you look at the regulatory political and social climate uh you know if you are not continuing to invest and move your company towards that space you're going to be out of business over the long term governmental funding air france you know klm lufthansa uh many others uh are contingent upon improving environmental uh sustainability through refleeting and so while certainly survival is is the is the mantra of the day as it should be i just don't agree with the premise that esg has taken a back seat i think it's very much there it's perhaps not talked about as much because what's talked about is airline survival who's going to go into bankruptcy but i can tell you in our direct discussions with airlines by no means is this forgotten it's very much there as a part of the big picture in moving airlines forward and improving their efficiency don't forget that the most modern aircraft not only are the most environmental sustainable but they're far more fuel fuel efficient and they're far more maintenance efficient and in all aspects they transport more passengers over a greater range taking more payload than other things so um you know all these things blend in together so while i would agree it's it's you know uh not the most pressing from a day-to-day survival thing today it is very much in the calculus of well-run airlines as they look to the long-term future and and on that message question is there enough being done to get across to the general public the improvements whether it's new technology aircraft other investments that are being made could there be more to be done to talk about the good things that are happening yeah uh well the answer i think clearly so far is no not enough has been done i think airlines have tried um you know uh and and try it in the most open way i would cite for example uh for example peter albers uh at klm you know started saying months ago you know we we don't encourage all passengers to take airline traffic for the shortest flights use your good common sense judgment um that's a kind of a an amazing statement that i don't think we would have heard from any airline ceo two years ago or three years ago but i think it shows the importance of global sustainability i mean we only have one planet and more and more it's becoming threatened and this just isn't going to leave the minds of elected officials and more importantly passengers social media so you know i i really think that the industry needs to do a better job of educating the public you know about the efficiency of global air transport about how little fuel is burned for every mile you sit in that seat compared to other forms of transportation that when you look above in the sky and see contrails you're largely seeing water vapor you're not seeing air pollution um and look i i i don't have miracle solutions but yet to say that i think it's a key part of airline long-term growth and prosperity to to improve the delivery and the messaging of the important things that airlines are doing in fact all across the spectrum not just with their fleets but in all aspects of their operations uh to address this global issue and global concern which is huge just in closing then john can i ask you as you look out over 2021 after you know a year that like no other and hopefully like no other will ever see again what are your optimism levels uh just put your air lease hat on how optimistic are you looking out over the next 12 months i am extremely optimistic long term for the airline industry it's a fundamental part of our global fabric uh it's how we move goods it's how we transport people it's how people get together uh and if if if history is any lesson if you go back i don't know 30 40 50 years after every single event 911 for example uh asian financial crisis uh u.s financial crisis in 2009 time frame uh volcanoes erupting when there has been a time of minimize or reduced global air travel as has been and that reduction has been forced largely by external events air traffic has always come back roaringly strong and i believe we're going to witness that like no time in the past assuming successful vaccine vaccination distribution globally and and better numbers the pent-up demand in my view is clearly there i'm also not as i would call negative as as some people are in business global traffic the business traffic international traffic a lot of speculation that companies are going to do everything virtually online and certainly that has proven to be a tool uh you know whether it's these zoom kinds of things we're doing now uh microsoft teams those all have a role and and those have hugely expanded but over the long term uh i still don't think that um you can conduct uh business globally and open new marketplaces people where you've never been before you got to meet people you got to meet the counterparties you're doing business if i'm going to do business with a new airline i can do it like you and i are talking now that's great but nothing replaces that personal contact especially in times of great stress so that's challenge but i'm not as pessimistic as as i've read many reports to be i think people need to interact and i think the airline industry is just fundamentally woven into the need for human contact and so i am i am resoundingly optimistic over the long term going through a lot of difficulties right now but i believe the airline industry serves the human condition and therefore it is here to stay and we'll continue to grow and prosper john on that note i would like to thank you for your brilliant insights over the course of this conversation and on behalf of kpmg and airline economics we wish you and early's corp the best over the coming year thanks emil so thanks to you and early economics always enjoy